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CapitaLand Shares Fall Despite Quarterly Profit
February 22, 2011

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Singapore. CapitaLand, Southeast Asia’s biggest real estate company, reported higher than expected quarterly net profit on Tuesday, although the number was over 40 percent down from a year ago.

The company’s results come on the back of concerns that China and Singapore’s recent measures to curb rising real estate prices may hurt its sales.

CapitaLand shares fell 1.5 percent to 3.31 Singapore dollar in early trade, and have lost 9.4 percent since the start of the year, underperforming the Straits Times Index’s 3.7 percent loss. However, traders said the share price decline in Tuesday’s morning session was in line with weakness in the broader market due to concerns about political risk in Libya and China’s tightening policy.

“On the residential side, the sales recognition for their China properties were a little slower although they sold quite a substantial number of units there,” Donald Chua, an analyst at CIMB Research, said of CapitaLand’s result. “The main issue going forward is whether they will delay the launches of their Chinese properties given the weaker sentiment there.”

CapitaLand, about 40 percent owned by Singapore state investor Temasek, said it plans to launch more homes and malls in Singapore and China. “We target to build 10,000 to 15,000 homes a year over the next three to five years,” said Liew Mun Leong, president and CEO of CapitaLand. It also plans to launch 1,700 homes in Singapore and about 4,000 in China, he added.

“In 2011, CapitaMalls Asia targets to invest another 2 billion Singapore dollars in new shopping malls in Singapore, Malaysia and China, to augment our 91 shopping malls in Asia Pacific,” Liew said.

The company said it earned 522.1 million Singapore dollar ($409.3 million) net profit in the fourth quarter, 41 percent lower than 885.7 million Singapore dollar a year ago due to smaller one-off gains.

Reuters